Mortgage loans are quite common around us, but how many people know about the second mortgage of a house? In the process of buying and selling real estate, people often hear about house mortgages, and second mortgages are also common. When people are in urgent need of money, their houses can be mortgaged for the second time. Nowadays, people often use loans to buy houses, and the emergence of second mortgages can also solve people's urgent needs. Let's analyze what are the conditions for second mortgages of houses? What are the risks of a second mortgage?

What are the conditions for the second mortgage of a house?

The house used for the second mortgage must be an existing house, the mortgage registration of the property has been completed, and the bank is the mortgagee of the house. The house has been insured, and the original insurance policy is in the custody of the bank.

1. Houses that can apply for a second mortgage loan generally have better value preservation. Therefore, the location of the house and the surrounding facilities should be better.

2. The house for which the second mortgage loan is applied cannot be an off-plan house.

3. The borrower’s credit must be good, and the existing mortgage loan must have no serious overdue record.

4. The borrower must have a stable income and be able to guarantee the repayment of the new loan on time while repaying the existing loan.

5. Under normal circumstances, the bank that can handle second mortgage loans is the same bank that handles first mortgage loans.

6. Sometimes, banks will also require borrowers to apply for insurance in accordance with regulations.

7. When applying for a second mortgage loan, it is often required that the first loan has been repaid on time for a certain number of years. For example, the requirement of Bank of China is 2 years.

What are the risks of second mortgages

1. Loan interest rates

Because banks or small lending institutions are under greater pressure on second mortgage loans, When applying for a second mortgage loan, the loan interest rate is often very high. The loan interest rate is calculated on a monthly basis, and generally, the monthly loan interest rate paid for a second mortgage loan is about 5% of the loan amount.

2. There is no negotiation process in the repayment process

Bank requirements for second mortgage loans are particularly strict during the repayment process. During the repayment process, once the repayer is unable to repay , banks or small loan companies will immediately auction the second mortgage property without giving the mortgagor a chance to negotiate. Therefore, applicants must pay attention to the repayment time.

3. The loan amount applied for is not high

Although the second mortgage procedure is simple, the loan amount that can be applied for is indeed not high. According to existing regulations, the amount of a second mortgage loan cannot exceed the original value of the mortgage minus the amount of the original loan. Therefore, the loan that can be applied for will be greatly reduced even if the amount of the original loan is deducted.

This is the detailed introduction of what are the conditions for a second mortgage of a house and the risks of a second mortgage. There are many questions about house mortgages, and people should understand them in detail during the loan process. When applying for a second mortgage loan, the conditions will be relatively harsh, so people should pay attention to the conditions as well as the repayment issues after the loan.